CoinDesk
Ripple's proposed lending system for the XRP Ledger has gained three validator votes since October 19, bringing support to 22 of the 35 validators on the network's default list. The lending amendment needs 29 votes for two consecutive weeks to activate. SingleAssetVault, a required amendment that creates lending pools, has 23 votes and must clear the same threshold.
The lending proposal's first patch, LendingProtocolV1_1, also has 22 votes. A November 10 snapshot showed the same counts for lending and the vaults, with no change by Wednesday.
Why it matters
The proposed system would let lenders deposit XRP or another token into a vault, from which a broker would issue fixed-term loans without borrower collateral. Depositors would depend on the broker's off-chain credit assessments and risk management, backed by first-loss capital supplied by the broker.
Ripple has pitched the arrangement to payment companies that need cash while cross-border settlements clear. Developers are also preparing LendingProtocolV1_2, an amendment designed to address a transaction conflict when another loan on the same broker lands first. A lending code cleanup went live on November 4.
Market impact
The vote gains bring the proposal closer to activation, but lending remains seven votes short and the vault amendment is six short. Both must then maintain the required support for two consecutive weeks.
For prospective depositors, the lack of borrower collateral makes broker underwriting and first-loss capital central to the credit risk. The public tracker reports vote counts but does not identify which validators changed their positions.
Frequently asked questions
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How many more votes does each required amendment need?
The lending amendment needs seven more votes to reach 29, while SingleAssetVault needs six. Both must maintain the threshold for two consecutive weeks.
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How would lenders fund loans on the XRP Ledger?
Lenders would deposit XRP or another token into a vault. A loan broker would then lend those funds for a fixed term.
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What protects depositors if borrowers do not post collateral?
The design relies on brokers' off-chain credit assessments and risk management, backed by first-loss capital supplied by the broker.
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Which businesses has Ripple targeted with the lending system?
Ripple has pitched the arrangement to payment companies that need cash while cross-border settlements clear.
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What are developers preparing while the vote remains pending?
Developers are preparing LendingProtocolV1_2 to address a transaction conflict when another loan on the same broker lands first. A separate lending code cleanup went live on November 4.
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